Professor Warren Takes on the Credit Industry

I had the pleasure of serving as the library liaison to Professor Elizabeth Warren when I worked at the University of Pennsylvania Law School. She has since moved on to Harvard Law School, where she specializes in commercial law and bankruptcy law. Her treatises on bankruptcy have been very influential, drawing as they do on empirical methods to paint vivid portraits of real people caught in the web of debt. Threee of the best known are As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America, The Fragile Middle Class: Americans in Debt, and The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke. Through her scholarship, she has helped to change the image of debtors, sometimes characterized as wastrels and spendthrifts, to that of victims of predatory lending practices. During the current debate over health care reform, one of the themes has been the number of people who have declared bankruptcy because of medical debt caused by lack of health insurance. Professor Warren has been instrumental in bringing this issue to the forefront of the debate.

She is the subject of an entertaining article in today's Boston Globe. Professor Warren came from a family that struggled after a series of financial reversals. Both of her parents worked, but things were always difficult for them. This experience helps her to empathize with other families that are struggling despite hard work. She has proposed a new federal agency, the Consumer Financial Protection Agency, which is the subject of a bill, H.R. 3126, that was introduced on July 8 by Representative Barney Frank. It passed the House Financial Services Committee on October 29, but faces opposition in the full House and Senate. If approved, the new agency would regulate consumer financial products, and is vehemently opposed by business groups. Some in the business community accuse Professor Warren of positioning herself to be the director of the agency if it comes into being, but she feels any such discussion is "premature." In the meantime, she continues to teach and to serve as TARP overseer.